Fair Isaac (NYSE:FICO) raised its fiscal 2026 outlook after reporting third-quarter revenue growth of 26%, supported by higher mortgage score pricing and continued expansion of its FICO Platform business.
The company reported third-quarter revenue of $674 million, while GAAP net income rose 30% year over year to $237 million. GAAP earnings per share increased 41% to $10.45. On a non-GAAP basis, net income was $277 million, up 31%, and earnings per share were $12.18, up 42%.
Scores Segment Drives Growth
The Scores segment generated $459 million in revenue, up 41% from the prior-year quarter. Business-to-business Scores revenue rose 49%, primarily reflecting a higher mortgage-origination score unit price, according to CFO Steve Weber.
Mortgage-origination score volumes increased by low single digits year over year, while mortgage-origination revenue climbed 97%. Mortgage-originations revenue represented 71% of B2B Scores revenue and 62% of total Scores revenue during the quarter.
- Auto-originations revenue increased 15% year over year.
- Credit card, personal loan and other originations revenue rose 9%.
- Business-to-consumer Scores revenue increased 5%.
CEO Will Lansing said elevated interest rates and affordability pressures continue to weigh on the mortgage market, keeping originations below historical levels. He said mortgage activity slowed as rates increased during the quarter, though the market has held up better than FICO had initially expected for the year.
During the question-and-answer session, Lansing said the company was not seeing mortgage score volume losses associated with lenders using VantageScore in addition to FICO scores. He characterized the emerging environment as one that enables “score shopping,” where lenders may use multiple scores to identify the most favorable consumer outcome.
Lansing said FICO expects FICO Score 10T eventually could join Classic FICO and VantageScore in the mortgage market. The company currently bundles 10T with Classic FICO at no additional cost in its adopter program, though Lansing said final future pricing decisions have not been made.
Mortgage Initiatives Remain in Progress
FICO highlighted progress around FICO Score 10T, including the release by Fannie Mae and Freddie Mac of expanded historical datasets that allow mortgage participants to evaluate the model using government-sponsored enterprise mortgage data. Lansing said an independent Milliman analysis found that FICO Score 10T outperformed VantageScore 4 across the statistical measures and origination years studied.
The company’s FICO Score 10T Adopter program has grown to 70 lenders and represents roughly 55% of volume from the top 50 mortgage originators, based on 2025 HMDA data, according to FICO. The company also said 10T is now integrated into Optimal Blue’s mortgage platform and LoanPass’s product pricing and eligibility platform.
FICO’s Mortgage Direct Licensing Program, however, remains pending certification from one of the GSEs. Lansing said the operational work is complete and the company is waiting for the certification needed to launch the program.
FICO has direct license agreements with partners and resellers representing about 60% of mortgage volume and said it is close to signing two additional major resellers. The company said those agreements would bring it closer to 90% of mortgage volume once finalized.
The program is intended to offer lenders a performance-based pricing model, including a funding-fee component. Lansing said lenders and resellers have shown significant interest, although the model is not yet available because the Direct Licensing Program has not gone live.
Platform Revenue Surpasses Non-Platform Revenue
FICO’s Software segment reported revenue of $215 million, up 2% year over year. The result included 66% growth in Platform revenue and a 25% decline in non-platform revenue. Excluding point-in-time revenue and professional services revenue, Software segment revenue grew 10%, Weber said.
Platform annual recurring revenue increased 62% to $413 million and exceeded non-platform ARR of $403 million for the first time. Total Software ARR was $816 million, up 10% from a year earlier.
FICO said Platform ARR growth excluding migrations was in the mid-30% range, driven by new customer wins, additional use cases and higher volumes from existing customers. Platform net retention was 148%, while non-platform net retention was 82%. The company attributed the non-platform decline primarily to migrations and end-of-life products.
Software ACV bookings were $29 million in the quarter. Trailing 12-month ACV bookings reached $128 million, up 39% from the comparable prior-year period. Lansing said the company expects continued acceleration in bookings and continued divergence between Platform growth and the declining non-platform business as it migrates customers from older products.
FICO also expanded its collaboration with Accenture in July. Lansing said the partnership is intended to improve distribution of FICO’s intellectual property and combine FICO Platform with Accenture’s risk, artificial intelligence and industry capabilities. The company expects a phased geographic rollout.
Later in calendar 2026, FICO expects general availability of a next-generation FICO Platform that includes an enterprise fraud solution.
Guidance Raised
FICO raised its full-year fiscal 2026 outlook, forecasting revenue of $2.53 billion, representing 20% growth from the prior year. The company now expects GAAP net income of $850 million and GAAP earnings per share of $36.86, increases of 30% and 39%, respectively.
Non-GAAP net income guidance was raised to $979 million, with non-GAAP earnings per share expected to reach $42.43, up 33% and 42%, respectively.
FICO reported a 62% non-GAAP operating margin in the third quarter, compared with 57% a year earlier. The company ended the quarter with $305 million in cash and marketable investments and $5.58 billion in total debt. Weber said FICO expects to use cash to reduce debt in the near term following the accelerated share repurchase, while continuing to view buybacks as an attractive use of capital beyond that period.
About Fair Isaac (NYSE:FICO)
Fair Isaac Corporation, commonly known as FICO, is a data analytics and software company best known for its FICO Score, a widely used credit-scoring system that helps lenders assess consumer credit risk. Founded in 1956 by Bill Fair and Earl Isaac, the company has evolved from its origins in statistical credit scoring to a broader focus on predictive analytics, decision management and artificial intelligence-driven solutions for financial services and other industries. FICO is headquartered in San Jose, California, and operates globally, serving clients across North America, Latin America, Europe, the Middle East, Africa and the Asia-Pacific region.
FICO’s product portfolio centers on analytics and decisioning technologies.
